Category: Australia & NZ

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ASX Market Snapshot

Bull-Bear Market Leading Index
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, while the one on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks when market valuations are high, but we advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Leading Index is at 54, down from 64 last week, signaling a bear market. Two of four Australian indicators signal risk-off after the 3-month moving average of NAB Forward Orders fell to -2 for May 2026. One of two Chinese indicators signals risk-off, and the ASX 200 Financials Index is testing primary support, so we are on bear watch. ASX Bull/Bear Market Indicator Australian leading indicators carry a 40% weighting in the ASX Leading Index, China 20%, and the US Leading Index the remaining 40%.

Financial Sector

The ASX 200 Financials Index (XFJ) is below its 50-week weighted moving average, and testing primary support at 9000. A breach of 9000, confirmed by follow-through below 8900, would flag a primary downtrend — a risk-off signal. ASX 200 Financials Index

Housing Approvals

Activity in the Australian housing sector is improving, with the 3-month moving average of private housing approvals rising to 17.4K in April. A cross of 3-month MA values (navy) to below the 20-year MA (red) would signal risk-off. Australian Private Housing Approvals

Stock Pricing

ASX stock pricing fell sharply to 73.96 from 76.31 percent last week, largely due to falling forward Price-Earnings Ratios. Our highest reading was 92.23 percent in August 2025, with a low of 67.85 percent in April 2025.

ASX Stock Market Value Indicator

We use z-scores to measure each indicator's current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher stock market prices are relative to their historical mean, the greater the risk of a sharp drawdown.

Conclusion

The Bull-Bear indicator suggests that the Australian economy is slowing. Two Australian indicators — NAB Forward Orders and the ASX 200 Financial Index — are close to the threshold but do not yet signal risk-off. However, they keep us on bear alert.

Meanwhile, valuations remain high, increasing the risk of a drawdown.

Acknowledgments

Managing Risk

To find out more, go to Managing Risk on the top menu, or see:

Posted on

ASX Market Snapshot

Bull-Bear Market Leading Index
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, while the one on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks when market valuations are high, but we advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Leading Index is at 54, down from 64 last week, signaling a bear market. Two of four Australian indicators signal risk-off after the 3-month moving average of NAB Forward Orders fell to -2 for May 2026. One of two Chinese indicators signals risk-off, and the ASX 200 Financials Index is testing primary support, so we are on bear watch. ASX Bull/Bear Market Indicator Australian leading indicators carry a 40% weighting in the ASX Leading Index, China 20%, and the US Leading Index the remaining 40%.

Financial Sector

The ASX 200 Financials Index (XFJ) is below its 50-week weighted moving average, and testing primary support at 9000. A breach of 9000, confirmed by follow-through below 8900, would flag a primary downtrend — a risk-off signal. ASX 200 Financials Index

Stock Pricing

ASX stock pricing fell sharply to 73.96 from 76.31 percent last week, largely due to falling forward Price-Earnings Ratios. Our highest reading was 92.23 percent in August 2025, with a low of 67.85 percent in April 2025.

ASX Stock Market Value Indicator

We use z-scores to measure each indicator's current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher stock market prices are relative to their historical mean, the greater the risk of a sharp drawdown.

Conclusion

The Bull-Bear indicator suggests that the Australian economy is slowing. Two Australian indicators are falling, and, while not yet signaling risk-off, they keep us on bear alert.

On the other hand, valuations remain high, increasing the risk of a drawdown.

Acknowledgments

Managing Risk

To find out more, go to Managing Risk on the top menu, or see:

Posted on

ASX Market Snapshot

Bull-Bear Market Leading Index
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, while the one on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks when market valuations are high, but we advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Leading Index is at 54, down from 64 last week, signaling a bear market. Two of four Australian indicators signal risk-off after the 3-month moving average of NAB Forward Orders fell to -2 for May 2026. One of two Chinese indicators signals risk-off, and the ASX 200 Financials Index is testing primary support, so we are on bear watch. ASX Bull/Bear Market Indicator Australian leading indicators carry a 40% weighting in the ASX Leading Index, China 20%, and the US Leading Index the remaining 40%.

Financial Sector

The ASX 200 Financials Index (XFJ) is below its 50-week weighted moving average, and testing primary support at 9000. A breach of 9000, confirmed by follow-through below 8900, would flag a primary downtrend — a risk-off signal. ASX 200 Financials Index

NAB Forward Orders

NAB Forward Orders recovered to zero in May 2026, from -5 in April, but the 3-month moving average fell to -2. The 3-month MA below zero signals risk-off.

NAB Forward Orders

Stock Pricing

ASX stock pricing fell sharply to 73.96 from 76.31 percent last week, largely due to falling forward Price-Earnings Ratios. Our highest reading was 92.23 percent in August 2025, with a low of 67.85 percent in April 2025.

ASX Stock Market Value Indicator

We use z-scores to measure each indicator's current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher stock market prices are relative to their historical mean, the greater the risk of a sharp drawdown.

Conclusion

The Bull-Bear indicator suggests that the Australian economy is slowing. Two more indicators have fallen sharply. While they do not yet signal risk-off, we are on bear alert.

On the other hand, valuations remain high, increasing the risk of a drawdown.

Acknowledgments

Managing Risk

To find out more, go to Managing Risk on the top menu, or see:

Posted on

ASX Market Snapshot

Bull/Bear Market Leading Index
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, while the one on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks when market valuations are high, but we advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Leading Index is at 54, down from 64 last week, signaling a bear market. Two of four Australian indicators signal risk-off after the 3-month moving average of NAB Forward Orders fell to -2 for May 2026. One of two Chinese indicators signals risk-off, and the ASX 200 Financials Index is testing primary support, so we are on bear watch. ASX Bull/Bear Market Indicator Australian leading indicators carry a 40% weighting in the ASX Leading Index, China 20%, and the US Leading Index the remaining 40%.

Financial Sector

The ASX 200 Financials Index (XFJ) is below its 50-week weighted moving average, and testing primary support at 9000. A breach of 9000, confirmed by follow-through below 8900, would flag a primary downtrend — a risk-off signal. ASX 200 Financials Index

China

The OECD Composite Leading Indicator for China lifted to 98.91 in May, from 98.8 in April. Values below 99.0, or a fall of more than 3 points from the preceding peak, signal risk-off.

China: OECD Composite Leading Indicator

China is Australia's largest export market, and the performance of the Chinese economy directly impacts the ASX.

Stock Pricing

ASX stock pricing jumped to 76.72 percent, from 73.92 percent last week. The highest reading was 92.23 percent in August 2025, compared with a low of 67.85 percent in April 2025.

ASX Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher stock market prices are relative to their historical mean, the greater the risk of a sharp drawdown.

Conclusion

The ASX bull-bear indicator at 64% signals a mild bull market, while stock market pricing remains high, increasing the risk of a drawdown.

Acknowledgments

Managing Risk

To find out more, go to Managing Risk on the top menu, or see:

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Trump Talks “Peace Deal” But Nothing Stops This Train

Key Points

  • President Trump again baits financial markets with the prospect of a peace agreement.
  • Brent Crude (July’26 futures) is testing support at $100 per barrel.
  • However, the crude market faces critical shortages even if a peace deal is signed.
  • The S&P 500 rallied to a new high at 7365, while the Dow threatens a breakout above 50,000.
  • The ISM Services PMI warns that growth is slowing, while soaring prices signal inflationary pressures.
  • Lithium is in a strong uptrend, while Copper, Critical Materials, and Uranium show signs of a recovery.
  • The RBA hiked rates this week and would like to hold for a while, but rising prices may force further hikes.

ISLAMABAD/WASHINGTON/TEL AVIV, May 7 (Reuters) – U.S. President Donald Trump predicted a swift end to the ​war with Iran as Tehran considered a U.S. peace proposal that sources said would formally end the conflict while leaving unresolved key U.S. demands that Iran suspend ‌its nuclear program and reopen the Strait of Hormuz.

An Iranian foreign ministry spokesperson cited by Iran’s ISNA news agency said Tehran would convey its response, while Iranian lawmaker Ebrahim Rezaei, a spokesperson for parliament’s powerful foreign policy and national security committee, described the proposal as “more of an American wish-list than a reality.”

“They want to make a deal. We’ve had very good talks over the last 24 hours, and it’s very possible that we’ll make ​a deal,” Trump told reporters in the Oval Office on Wednesday, saying later “it’ll be over quickly.”

Trump has repeatedly played up the prospect of an agreement to end the war ​that started on February 28, so far without success. The two sides remain at odds over a variety of difficult issues, such as Iran’s nuclear ⁠ambitions and its control of the Strait of Hormuz, which before the war handled one-fifth of the world’s oil and gas supply.

A Pakistani source and another source briefed on the mediation ​said an agreement was close on a one-page memorandum that would formally end the conflict. That would kick off discussions to unblock shipping through the strait, lift U.S. sanctions on Iran and set ​curbs on Iran’s nuclear program, the sources said.

A separate senior Pakistani official involved in the talks told Reuters on Thursday that negotiators were hopeful of reaching a deal but noted gaps between the sides remained.

Brent Crude (July futures), buoyed by optimism over a prospective peace deal, is retracing to test support at $100 per barrel.

Brent Crude Futures (ICE July'26)

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Australian Bear Alert

Key Points

  • Headline CPI jumped by 1.1% in the month of March, lifting the annual increase to 4.6%.
  • Australian business and consumer confidence are falling.

Australia’s headline consumer price index jumped by 1.1% in March 2026. Automotive fuel was the main contributor, rising 32.8 percent in March, the strongest monthly increase since the series began in 2017. The annual CPI increase lifted to 4.6%, below the expected 4.7%, but March is too early for pass-through effects to be felt in other sectors of the economy.

Australian CPI - Monthly & Annual

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ASX Market Snapshot

Bull-Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, while the one on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks when market valuations are high, but we advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Market indicator remains at 56%, from 66% nine weeks ago. One of four Australian indicators and one of two Chinese indicators signal risk-off. When combined with the US Bull/Bear indicator, which has a 40% weighting, the composite indicator signals a mild bear market.

ASX Bull-Bear Market Indicator

The ASX 200 Financials Index is retracing to test primary support at 9000. A breach would indicate reversal to a primary downtrend, signaling risk-off.

ASX 200 Financials Index

Stock Pricing

ASX stock pricing declined to 76.24 percent, from 77.79 percent last week. The August 2025 high was 92.23 percent, with an April low of 67.85 percent.

ASX Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher stock market prices are relative to their historical mean, the greater the risk of a sharp drawdown.

Conclusion

The ASX bull-bear indicator at 56% signals a mild bear market, while stock market pricing remains high, increasing the risk of a drawdown.

Acknowledgments

Posted on

ASX Market Snapshot

Bull-Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, while the one on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks when market valuations are high, but we advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Market indicator remains at 56%, from 66% nine weeks ago. One of four Australian indicators and one of two Chinese indicators signal risk-off. When combined with the US Bull/Bear indicator, which has a 40% weighting, the composite indicator signals a mild bear market.

ASX Bull-Bear Market Indicator

NAB Forward Orders fell to -1 in March, but the 3-month moving average remains at 2.33. Values above zero signal risk-on.

NAB Forward Orders

Stock Pricing

ASX stock pricing declined to 77.79 percent, from 79.17 percent last week. The August 2025 high was 92.23 percent, with an April low of 67.85 percent.

ASX Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher stock market prices are relative to their historical mean, the greater the risk of a sharp drawdown.

The ASX 20 Price-to-Sales ratio (20% trimmed mean) declined to 4.37 from 4.46 last week, but remains above its long-term average of 4.17.

ASX 20 Price-to-Sales 20% Trimmed Mean

Conclusion

The ASX bull-bear indicator at 56% signals a mild bear market, while stock market pricing remains high, with elevated risk of a drawdown.

Acknowledgments

Posted on

ASX Market Snapshot

Bull-Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, while the one on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks when market valuations are high, but we advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Market indicator remains at 56%, from 66% eight weeks ago. One of four Australian indicators and one of two Chinese indicators signal risk-off. When combined with the US Bull/Bear indicator, which has a 40% weighting, the composite indicator signals a mild bear market.

ASX Bull-Bear Market Indicator

The ASX 200 Financials Index broke resistance at 10,000, indicating a strong uptrend, signaling risk-on.

ASX 200 Financials Index

Stock Pricing

ASX stock pricing improved slightly to 79.17 percent, from 78.87 percent last week. The August 2025 high was 92.23 percent, with an April low of 67.85 percent.

ASX Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher stock market prices are relative to their historical mean, the greater the risk of a sharp drawdown.

The ASX stock market capitalization to GDP ratio fell to 1.10 at the end of March, but is still above the long-term average of 1.02.

ASX Stock Market Capitalisation to GDP

Conclusion

The ASX bull-bear indicator at 56% signals a mild bear market, while stock market pricing continues to warn of the elevated risk of a drawdown.

Acknowledgments

Posted on

Australian PMI Dives to Recession Levels

Key Points

  • The S&P Global Australia Composite PMI dived to 46.6 in March, from 52.4 in February.

The S&P Global Australia Composite PMI dived to 46.6 in March, from 52.4 in February. The fall below 49.0 marks our first recession warning since December 2023.

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